Today, so many businesses are shifting from standard labor to freelance labor that there’s even a term for it: the freelance revolution. What does this revolution entail? An enormous spike in the use of freelancers as business labor. How big is that spike? A whopping 59%.
This shift has been driven by several factors, including the rise of the gig economy, the increasing availability of remote work, and businesses’ ever-present need to be flexible and responsive to evolving market conditions.
While many businesses are eager to tap into the benefits of using freelancers, business owners and hiring managers often struggle to leap effectively and sustainably. In this article, we will explore some of the key challenges businesses face when using freelancers and some of the different ways business owners and hiring managers can overcome them.
One of the most prescient challenges businesses face when using freelancers is sourcing the right talent. It’s common knowledge that hiring managers can now turn to marketplaces like UpWork and Fiverr. However, it is still challenging to identify the best candidates for a particular job from an already saturated pool of laborers. In other words, with so many freelancers available online (seemingly at a moment’s notice!), it can be difficult to identify the best candidate for a particular job.
To overcome this challenge, businesses should be clear about the skills and experience that they seek–the more specific the parameters, the better. Business owners and hiring managers should begin by mapping out a clear project plan and then asking themselves: does this work need to be done by an experienced candidate, or could an entry-level worker handle it? Other details like rate, time zone, meeting availability, and expected turnaround are important to know in advance. It is also important to note that while this is realistic for a business owner to accomplish themselves, some freelance marketplaces offer white glove services, where you can rely on the vetting and screening processes that the platform itself has already implemented.
Another challenge that businesses face when using freelancers is project management. With traditional employees, businesses know what hours to expect and can lay ground rules regarding online availability, deadlines, and more. Although business owners and hiring managers certainly retain control over when they want the work completed, it takes clear communication and expectation setting to ensure that freelancers communicate in a style that suits an individual business.
This is because, unlike traditional employees, freelancers work remotely and are not always available to chat during standard business hours. That’s where clear expectations come in. Business owners and hiring managers must communicate deadlines and communication preferences before a freelancer is hired, not after. Furthermore, if a business utilizes project management software like Asana or Monday.com, it is essential to give freelancers clear parameters regarding how they should engage with these tools. This will allow business owners and hiring managers to track progress and ensure work is timely.
Another challenge that businesses face when using freelancers is ensuring that they are compliant with relevant laws and regulations. In the US, freelancers are most often classified as independent contractors. This means that businesses are not required to provide them with benefits or pay employment taxes on their behalf. However, misclassifying a full-time worker as a contractor can bring steep fines and penalties. To prevent this problem, businesses should consult legal and tax experts to ensure compliance with all relevant laws and regulations.
Finally, businesses may struggle to integrate freelancers into their existing workplace culture. By nature, freelancers are not incentivized to maintain the same level of loyalty or commitment as a traditional employee, and they may not be deeply invested in the success of your business. To overcome this challenge, businesses should onboard freelancers thoroughly to ensure they are integrated into the team.
At the end of the day, using freelancers as labor can offer businesses a host of benefits, financial and otherwise. However, this benefit does not come without its liabilities. This is why it is critical to approach this strategy strategically. By proactively addressing the challenges outlined above, businesses can successfully harness the power of the freelancer revolution and build a more flexible and responsive workforce than ever.